Rangiora's Farmers department store, closed for nearly two years, will be rebuilt despite an unsettled insurance dispute.

The store's lengthy closure has been blamed for the town centre's slow recovery following the earthquakes.

However, in an announcement today Farmers chief financial officer Michael Power said the company and property owner Mandeville Properties were working together to build a new store on the same site.

The new store of approximately 5000 square metres would include up to five speciality shops.

The current building suffered extensive damage in the earthquakes and has been the subject of a protracted dispute between Mandeville Properties and ACE Insurance Ltd.

Power said Farmers would continue to facilitate discussions between the insurer and the owners on a settlement of the claim.

"We understand how difficult this has been for our customers and the wider business community. While the question of insurance has yet to be settled we want to get things moving again as quickly as possible for the benefit of everyone,'' Power said.

He could not say when construction on the new store would begin.

"We're hopeful of getting things started very soon but because the details are yet to be worked out I really can't say when a new store will open."

Waimakariri District mayor David Ayers welcomed the announcement.

"We have been through trying times as a community and the retailing environment in central Rangiora has been very difficult for nearly two years. Farmers and its predecessors have been integral to Rangiora since the late nineteenth century and the town has sorely missed the store," Ayers said.

"This announcement will bring confidence back to the town, not only for central retailers but also for other owners and their potential tenants. We're more than ready to say welcome back Farmers."